Shiseido recently released its latest financial report for the period ending June 30, 2025. In the first half of the year, the group recorded sales of 22.996 billion RMB ($3.20 billion), down 7.6% year on year. Meanwhile, its core operating profit was 1.138 billion RMB ($158 million), up 21.3% year on year.
Notably, sales declined across all five of Shiseido’s global business regions in H1 of this year. Among them, the China&Travel-Retail segment saw the steepest fall, with sales of 8.476 billion RMB ($1.18 billion), down 12.4% year on year.
In the first half of 2025, Shiseido’s sales reached 23.0 billion RMB ($3.20 billion).
According to the financial report, from January to June this year, Shiseido recorded sales of 22.996 billion RMB ($3.20 billion), down 7.6% year on year, or 6.1% on a local-currency basis. Excluding the effects of exchange rates, business transfers, and acquisitions, actual sales declined 5.8% from the previous year. Core operating profit was 1.138 billion RMB ($158 million), an increase of about 200 million RMB ($27.8 million) from the same period last year, up 21.3% year on year. Operating profit swung from a loss of 133 million RMB ($18.5 million) in the same period last year to a profit of 881 million RMB ($122.6 million).
A review of Shiseido’s performance for the January–June period over the past five years shows that H1 2025 marked the largest decline in sales. In H1 2022, sales also fell slightly by 0.4%. In the other three years, the company posted year-on-year growth in sales. The largest increase occurred in H1 2021, when sales rose 21.5%. In other growth years, the increases were modest, at no more than 3%.
As a result of this year’s decline, Shiseido’s H1 sales hit their lowest level in five years, well below the 24.78 billion RMB ($3.45 billion) recorded in 2021. Notably, Shiseido ranked eighth in the 2024 global top 10 beauty companies list.
In terms of core operating profit, Shiseido has maintained profitability. The largest increase came in H1 2023, at 59%. In H1 2022 and H1 2024, core operating profit fell 23.9% and 31.3% year on year, respectively.
From the perspective of operating profit, except for the loss of 132 million RMB ($18.4 million) in H1 2024, Shiseido posted operating profits of 1.123 billion RMB ($156 million), 829 million RMB ($115 million), 665 million RMB ($92.5 million), and 881 million RMB ($122.6 million) in the other four years.
Looking at Shiseido’s individual brands, in H1 2025, CPB (Clé de Peau Beauté), NARS, and Elixir all posted solid growth. Elixir’s sales grew the fastest, at 12%. CPB achieved 3% growth, or 6% excluding China&Travel-Retail; NARS’ sales rose 2%, or 1% excluding China&Travel-Retail.
The Shiseido brand itself saw a 4% sales decline in H1, though sales rose 4% excluding China&Travel-Retail. Notably, Drunk Elephant’s sales plunged 57%. Other brands such as Anessa also recorded varying degrees of decline.
According to the financial report, two main factors drove the drop in sales: weak consumer spending due to the sluggish economy, which hurt China&Travel-Retail business, and the “continued struggles” of Drunk Elephant in the Americas. Profit declines in China&Travel-Retail, Europe, and the Americas were offset by the benefits of structural reforms in Japan and company-wide cost-saving measures.
China & Travel-Retail Sales Down 12.4%
By region, in the first half of this year, Shiseido recorded sales declines across all five of its core business areas, including Japan.
It is worth noting that at the end of March this year, Shiseido officially announced the merger of its China business and travel-retail business into the “China&Travel-Retail Business,” headed by Shiseido China CEO Toshinobu Umezu, in order to respond more flexibly to the volatile market environment.
Accordingly, in this financial report, Shiseido also stated that from the mid-2025 report onward, the China business and travel-retail business would be combined as the China&Travel-Retail Business. In addition, business previously recorded under “Others” (such as domestic sales of IPSA Co., Ltd.) and sales of beauty foods from the personal care division would now be included under the Japan business. After these adjustments, Shiseido’s global business is divided into five core segments: “Japan Business,” “China&Travel-Retail Business,” “Asia-Pacific Business,” “Americas Business,” and “Europe Business.”
Based on the latest regional classification, in the first half of this year, the steepest sales decline occurred in the China&Travel-Retail segment, where sales totaled 8.476 billion RMB ($1.18 billion), down 12.4% year on year. The next largest drop was in the Americas, where sales fell 10.6% to 2.506 billion RMB ($348 million). Meanwhile, sales in the Asia-Pacific, Europe, and Japan regions fell 2.3%, 5.3%, and 0.6%, respectively.
At the same time, sales in Shiseido’s “Others” division declined 38.4% in the first half of this year.
It is noteworthy that in the report, Shiseido repeatedly emphasized the drag from the sluggish China&Travel-Retail business on the company’s overall performance. It noted that due to the weak consumption environment, although the CPB and NARS brands posted strong growth during China’s mid-year “618” shopping festival, the overall offline situation remained challenging. In travel-retail (sales of cosmetics and fragrances at airports, downtown duty-free stores, etc.), subdued spending by Chinese tourists meant that both Hainan Island in China and South Korea faced difficult conditions, with significant revenue declines.
A review of Shiseido’s historical China (China&Travel-Retail) performance by CHAILEEDO shows that from 2016 to 2021, the region consistently maintained strong growth. However, since 2022, Shiseido China has recorded sales declines for two consecutive years. Although the region saw a modest 0.8% increase in sales in 2024, in the first half of 2025 the China&Travel-Retail segment again posted a sharp 12.4% drop.
From the perspective of core operating profit, aside from a loss of 190 million RMB ($26.4 million) in 2022, the China (China&Travel-Retail) business has maintained a healthy core operating profit. In fact, the first half of 2025 marked its highest ever, at 1.89 billion RMB ($263 million) in just six months—surpassing the full-year total in other years.
It is also worth mentioning that after the merger of the China business and travel-retail business, the China&Travel-Retail market became Shiseido’s largest sales region. The financial report shows that in the first half of this year, the segment accounted for 37% of total sales, followed by Japan with a 31% share.
As such, the China & Travel-Retail market, as Shiseido’s largest market, is of critical importance to the group.
Aiming to Secure Core Operating Profit of $247 million This Year
It is clear that despite varying degrees of sales declines in both Shiseido Group’s overall performance and the China Travel-Retail market, the company’s core operating profit has remained at a high level. Protecting profitability has been at the heart of Shiseido’s transformation strategy.
According to Shiseido’s “2025–2026 Action Plan,” the company aims to achieve its target of a 7% core operating profit margin by 2026 and to ensure that its full-year core operating profit in 2025 reaches 36.5 billion JPY ($254 million).
Shiseido noted that tariffs are expected to reduce the company’s full-year core profit by 3 billion JPY ($20.9 million). This includes rising raw material costs, higher import costs for certain fragrance products from Japan and Europe, and increased import costs for NARS, Drunk Elephant, and other products manufactured at its U.S. factory.
Nevertheless, Shiseido stated firmly, “Although there is currently a risk of sales decline, the company’s outlook for core operating profit remains unchanged, and we will continue to maximize opportunities while minimizing risks.”
The company also outlined and reviewed its strategic priorities, which will focus on three areas: strengthening brand fundamentals, establishing a high-profit structure, and optimizing management. Measures include selecting and concentrating on key brands, reducing fixed costs globally, promoting asset-light operations, and strengthening financial governance.
The financial report shows that in 2024, five of Shiseido’s brands exited the China market; in 2025, three brands have already exited the Japan market. In addition, in 2025, Shiseido plans to reduce headcount at its Americas headquarters and among outsourced staff by about 30%. Notably, last month foreign media reported that “Shiseido Americas will undergo large-scale layoffs.”
In terms of cost control, Shiseido cut costs by 13.5 billion JPY ($94.0 million) globally in the first half of this year. The company expects total cost reductions to reach 50 billion JPY ($348 million) over the next two years.
It is evident that against the backdrop of a global economic downturn, Shiseido is taking multiple measures to cut costs and improve efficiency, striving for stable growth. This is also the common challenge facing all beauty companies today.
